Microsoft is being outfoxed in the Web browser market by a foe it thought it vanquished long ago.

The early success of the Mozilla Foundation's Firefox browser is at best a black eye for Microsoft. (MSFT) The Redmond, Wash., software king has dominated the market for years with its ubiquitous Internet Explorer, only to see its market share slip in recent months

This is clearly another warning sign for Microsoft that a large percentage of their customer base is disenfranchised and they need to fix that," said Rob Enderle, an analyst with the Enderle Group.

Firefox threatens to take away search traffic, as well as the advertising that comes with it, from Microsoft's MSN properties.

"A lot of Microsoft's Web search utility is tied to its browser," Wilcox said. "Microsoft drives a lot of traffic to MSN Search through the browser integrated into Windows."